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Legacy Preferences at Private Universities

Earlier this week, I participated in a spirited “Room for Debate” discussion of legacy preferences in The New York Times. Citing research from a 2010 Century Foundation book I edited, titled Affirmative Action for the Rich, I argued that legacy preferences have no place in higher education.

A number of readers said it was important to draw a clear distinction between legacy preferences at public and private institutions. “The Ivies are private schools and, as such, they can accept or reject anyone,” one reader commented. Another suggested, “You all forget that most top universities are private, meaning they can let in whomever they like. State universities on the other hand have no business discriminating on any basis.”

This apparently common view is wrong as a matter of law. It is true that universities have important academic-freedom rights that include the shaping of the student body through admissions policies. But even private universities do not have unlimited discretion. And given the heavily reliance of private non-profit colleges and universities on federal funding and tax breaks, the law has long imposed a duty for institutions to pursue the public interest.

Title VI of the 1964 Civil Rights Act, for example, limits the discretion of institutions that receive federal funding (including virtually all private universities) to discriminate on such bases as race or national origin. That provision bars discrimination against minority students, and it also has places limits on what both public and private universities can do to promote racial and ethnic affirmative action. In the 1978 Bakke case, the Supreme Court held that public institutions (under the 14th amendment) and private institutions (under Title VI of the Civil Rights Act) cannot employ quotas. The 2003 Gratz decision likewise forbade all institutions from using mechanical affirmative action programs that automatically provide bonus points to members of under-represented racial or ethnic groups.

Education writer Peter Sacks notes in a chapter in Affirmative Action for the Rich that nonprofit private universities are not fully “private” in the sense that they receive enormous tax breaks compared with for-profit institutions. This privileged tax status is based on the theory that non-profits have a special obligation to serve the public interest. One analysis suggests the tax-exempt status of universities costs the government $18-billion annually. The tax deductibility of donations to nonprofit educational institutions costs the federal government another $5.9-billion.

With respect to legacy preferences, the tax deductibility of donations to private universities is particularly problematic, Sacks notes. Many studies find that there is a monetary value to attending a selective institution. To the extent that universities are inducing donations in exchange for conferring a monetary benefit–as institutions imply when they say legacy preferences are necessary to fund-raising efforts–Sacks notes that “the arrangement shatters the first principle underlying the charitable deduction, that donations to nonprofit organizations not ‘enrich the giver.’”

Finally, it’s important to note that private educational institutions are covered under the Civil Rights Act of 1866, which prohibits discrimination in the making of contracts, including contracts to attend a private school. As attorneys Steve Shadowen and Sozi Tulante note in their chapter, the 1866 statute not only bars discrimination based on race, as does the 1964 act, but also based on “ancestry.”

All in all, private institutions are unlikely to be able to hide behind their nonpublic status in the event that legacy preferences are challenged in the courts. Academic-freedom rights are not unlimited. Legacy-related donations may not be tax deductible. And under the provisions of the 1866 statute, legacy preferences which are based on “the lineage of a family” are unlikely to survive.